PETMI Theory of Monetary Institutions

Faculty of Economics and Administration
Autumn 2008
Extent and Intensity
1/1/0. 3 credit(s). Type of Completion: zk (examination).
Teacher(s)
Ing. Michal Kvasnička, Ph.D. (lecturer)
doc. Ing. Ondřej Krčál, Ph.D. (seminar tutor)
Guaranteed by
prof. PhDr. Kamil Fuchs, CSc.
Department of Economics – Faculty of Economics and Administration
Contact Person: Lydie Pravdová
Timetable
Mon 9:20–10:05 P312
  • Timetable of Seminar Groups:
PETMI/1: Mon 8:30–9:15 P312, M. Kvasnička
PETMI/2: Thu 9:20–11:00 S308, M. Kvasnička
Prerequisites
pemiki Microeconomics I || PřF:E1311 Microeconomy I
The student must know at least Introductory Microeconomics for this course.
Course Enrolment Limitations
The course is also offered to the students of the fields other than those the course is directly associated with.
The capacity limit for the course is 50 student(s).
Current registration and enrolment status: enrolled: 0/50, only registered: 0/50, only registered with preference (fields directly associated with the programme): 0/50
fields of study / plans the course is directly associated with
Course objectives
This course introduces the institutional part of the monetary theory. Emphasis is laid on basic principles of the operation and evolution of the monetary institutions (money, banks, banking system and central banks). Macroeconomic consequences are not discussed here.
At the end of this course, students should be able to:
1. understand why people trade and how they benefit from it; why financial operations are all forms of trade; the obstacles to these various forms of trade; the major techniques that markets and monetary institutions use to overcome these obstacles
2. understand why efficiency and stability of the monetary system is important; how inefficiencies provide opportunities for profit; why there are banking panics, stock market crashes and inflation; why monetary institutions face so many rules and regulations
3. understand what money is; explain why we use it; who creates money and how it is done; what features money should have and what are the costs of using it
4. understand what banks are; the different ways banks can increase their profits; the dangers they face doing so; why banks are always trying to get bigger and to expand into new activities and how they do it; use data about the types of institutions from which banks have evolved in the past to predict from which future banks are likely to evolve; explain how and why bank assets and liabilities change; how banks create money "out of thin air"
5. understand how lending and payment is done in the banking system; how the bank credit expansion is limited
6. understand how banks manage their liquidity and risk and how things can go wrong
7. state arguments why banks need to be certified or regulated; how this could it be done privately and with what limits; what are benefits and costs of the state regulation; know facts about the empirical relationship between state regulation and the banking system stability
8. understand what central banks are and what functions can define them; state arguments whether they are a product of a natural market evolution, or of a governmental regulation; whether they are necessary and why; make reasoned decisions what kind of bank regulations could improve their stability, and worsen it
9. formulate a reasoned prognosis for future evolution of the monetary institutions, and their impacts on the economy
Syllabus
  • 1. Introduction
  • 2. Exchange, its benefits and problems
  • 3. Principles and techniques to solve the problems of exchange
  • 4. Efficiency and stability of the exchange systems
  • 5. Money
  • 6. Bank
  • 7. Banking system
  • 8. Bank management of risk and liquidity
  • 9. Stability and regulation of the banking system
  • 10. Central bank
  • 11. State and money
Literature
  • KOHN, Meir G. Financial institutions and markets. 2nd ed. New York: Oxford University Press, 2004, xxx, 674. ISBN 0195134729. info
  • WHITE, Lawrence H. The theory of monetary institutions. 1. ed. Oxford: Blackwell, 1999, xii, 269 s. ISBN 0-631-21214-0. info
Assessment methods
The course is based on reading assignments of the course literature and interactive seminars. The exam is written.
Language of instruction
Czech
Further Comments
Study Materials
The course is taught annually.
Teacher's information
http://www.econ.muni.cz/~qasar/vyuka.html#moninst
The course is also listed under the following terms Autumn 2006, Autumn 2007.
  • Enrolment Statistics (recent)
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